November 5, 2024 | 19:39 GMT +7

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Friday- 14:00, 25/08/2023

Shrimp industry faces long-term difficulties

(VAN) The world shrimp market at the end of this year is very unpredictable. Shrimp businesses need to be ready to face difficulties that may last until the middle of next year.
A stall of Vietnamese shrimp products at Vietfish 2023. Photo: Son Trang.

A stall of Vietnamese shrimp products at Vietfish 2023. Photo: Son Trang.

At the International Shrimp Industry Conference that took place within the framework of Vietfish 2023, organized by VASEP, some international experts said that the quantity of shrimp in stock in import markets is still high.

Ronni Tan, a seafood expert from the American Grain Council, said that China imported a lot of shrimp in 2022 (950 thousand tons of shrimp) and the first four months of 2023, so shrimp inventories in the market This is extensive enough to meet the demand for 6 months.

Jasper Clausen, De Heus's global director of aquaculture, said that Europe's decline in imports in recent years was due to a large shrimp inventory.

Meanwhile, despite a sharp decrease in production in some countries, including Vietnam, global shrimp production this year still increased. According to Jasper Clausen, it is estimated that the total world shrimp production in 2023 will reach about 6.3 million tons, up 5% compared to 2022.

Facing that situation, Ho Quoc Luc, Chairman of the Board of Directors of Fimex VN, said that Vietnam's shrimp industry will still face difficulties until at least 2024. Besides market problems, this year, shrimp farming in Vietnam faced a situation of solid disease spread, causing high mortality, plus the high cost of feed, leading to an increase in the cost of shrimp farming. Also, the price of raw shrimp in the pond continued to decrease, making farmers uneasy about re-stocking.

Dr. Luc said that the area for re-stocking is low, only about 50%. This will cause Vietnam's shrimp output to drop sharply in the coming time, leading to a shortage of supply for processing from the third quarter of 2023.

The sharp drop in shrimp exports also puts tremendous pressure on Vietnam's shrimp industry. According to VASEP, shrimp export turnover in the first seven months of 2023 only reached US$ 1.9 billion, down 30% compared to last year. Compared to the world's major shrimp exporters, the decline in exports in Vietnam is the heaviest.

Commenting on the market in the last months of the year, Dr. Ho Quoc Luc said that the world's peak of raw shrimp supply has passed. From now to the end of the year, the raw material shrimp of the significant shrimp farming powers will decrease gradually. Reduced supply will leave importers with fewer options. On the other hand, the low current shrimp price is also an opportunity for importers to buy and hoard.

The world shrimp market has gone through a peak period regarding raw shrimp supply. Photo: Son Trang.

The world shrimp market has gone through a peak period regarding raw shrimp supply. Photo: Son Trang.

However, according to Dr. Ho Quoc Luc, many uncertain factors may affect shrimp export prospects in the last 6 months of the year. For example, what will be the speed of the world economy's recovery? Will inflation still increase or not?

In the second half of this year, although the supply of raw shrimp has decreased globally, it is unlikely that the source of goods from factories supplying to importers will decrease because inventories from processing factories are still high. The most obvious example is that although India's farming output in the first 6 months of the year decreased by 15%, the export volume decreased by only 1%.

Dr. Luc shared: “There is still no comment on shrimp price prospects until the end of the year. Therefore, although demand is expected to increase in the second half of the year thanks to festivals, it is still quite fragile due to many uncertain factors. Therefore, we should consider 2024 as the year of the recovery as the shrimp industry's difficulties will continue until the middle of next year."

However, year-end festivals are still an opportunity for Vietnamese shrimp because they will make it easier to consume deep-processed shrimp products. One of the strong points of Vietnam's shrimp industry is its deep processing capacity. In addition, the El Nino problem will affect the shrimp farming situation of many countries, including Vietnam.

Shrimp exports in 2023, our country will have to compete more strongly with shrimp from Ecuador and India. Besides, the price of imported shrimp in the world market has gradually decreased since the second half of 2022. It is expected to continue to fall when the global supply increases to about 6 million tons. Meanwhile, the domestic price of raw shrimp tends to increase, making it challenging to mobilize raw materials for export processing.

Also, with a large inventory, the US shrimp imports cannot recover in the first half of 2023. Demand will still focus more on small-size shrimp. The advantage is in favor of Ecuador because of the abundant supply of shrimp and the advantage of geographical location.

Dr. Ho Quoc Luc said that Vietnam's shrimp industry needs to promote its strength of deep processing. Increasing the proportion of deep processing can meet the expectation of profit. Besides, businesses must find new products to stay ahead and increase competitiveness.

Authors: Son Trang - Tuy Hoa

Translated by Tu Quyen

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